Full Press Release Details
Concentra Group Holdings Parent, Inc.
For Its Third Quarter Ended September 30,
2024 and Cash Dividend
ADDISON, TEXAS - October 31, 2024 -
Concentra Group Holdings Parent, Inc. ("Concentra," "we," "us," or "our") (NYSE:
CON) today announced results for its third quarter ended September 30, 2024, and the declaration of a cash dividend.
"We had a successful quarter and made significant
progress on key strategic initiatives and our separation from Select Medical. I am proud of our results, solid execution, and our colleagues'
continued dedication to delivering quality patient-centric care," said Keith Newton, Chief Executive Officer of Concentra.
Matt DiCanio, President & Chief Financial
Officer, added "We expanded our footprint in new and existing areas and achieved some of our highest patient satisfaction scores.
With our robust development pipeline and proven operating model, we are confident in our ability to meet our strategic business objectives
and are well positioned for continued growth through the rest of the year and into 2025."
Third Quarter 2024 Highlights
For the third quarter ended September 30,
Third Quarter 2024 Financial Overview
For the third quarter ended September 30,
2024, revenue increased 3.3% to $489.6 million, compared to $474.0 million for the same quarter, prior year. Income from operations increased
6.5% to $86.2 million for the third quarter ended September 30, 2024, compared to $80.9 million for the same quarter, prior year.
Net income was $45.8 million and earnings per common share was $0.37 for the third quarter ended September 30, 2024. Adjusted EBITDA
increased 2.7% to $101.6 million for the third quarter ended September 30, 2024, compared to $98.9 million for the same quarter,
prior year. The Adjusted EBITDA margin was 20.7% for the third quarter ended September 30, 2024, compared to 20.9% for the same quarter,
prior year. The definition of Adjusted EBITDA and a reconciliation of net income to Adjusted EBITDA are presented in table X of this release.
Year to Date September 30, 2024 Financial
For the nine months ended September 30, 2024,
revenue increased 2.7% to $1,435.2 million, compared to $1,397.3 million for the same period, prior year. Income from operations increased
3.1% to $245.7 million for the nine months ended September 30, 2024, compared to $238.3 million for the same period, prior year.
Net income was $149.1 million and earnings per common share was $1.32 for the nine months ended September 30, 2024. Adjusted EBITDA
increased 2.1% to $299.3 million for the nine months ended September 30, 2024, compared to $293.0 million for the same period, prior
year. The Adjusted EBITDA margin was 20.9% for the nine months ended September 30, 2024, compared to 21.0% for the same period, prior
year. The definition of Adjusted EBITDA and a reconciliation of net income to Adjusted EBITDA are presented in table X of this release.
As of September 30, 2024, Concentra's
balance sheet reflected cash of $136.8 million, total debt of $1,482.3 million and total assets of $2,481.0 million.
Cash flows provided by operating activities in
the third quarter ended September 30, 2024 totaled $65.9 million compared to $58.6 million for the same quarter, prior year. During
the third quarter ended September 30, 2024, capital expenditures totaled $15.1 million, excluding acquisitions.
On October 28, 2024, Concentra's Board
of Directors declared a cash dividend of $0.0625 per share. The dividend will be payable November 22, 2024, to stockholders of record
as of the close of business on November 13, 2024.
There is no assurance that future dividends will
be declared. The declaration and payment of dividends in the future are at the discretion of Concentra's Board of Directors after
taking into account various factors, including, but not limited to, Concentra's financial condition, operating results, available
cash and current and anticipated cash needs, the terms of Concentra's indebtedness, and other factors Concentra's Board of
Directors may deem to be relevant.
Concentra is issuing its 2024 business outlook.
Concentra expects revenue to be approximately $1.9 billion, Adjusted EBITDA to be in the range of $370.0 million to $375.0 million, capital
expenditures to be in the range of $65.0 million to $70.0 million and our net leverage ratio to be in the range of 3.5 to 3.6x. A reconciliation
of full year 2024 Adjusted EBITDA expectations to net income is presented in table XII of this release.
Initial Public Offering and Debt Transactions
On July 26, 2024, Concentra completed an
initial public offering ("IPO") of 22,500,000 shares of its common stock, par value $0.01 per share, at an initial public
offering price of $23.50 per share for net proceeds of $499.7 million after deducting underwriting discounts and commission of $29.1
million. In addition, the underwriters exercised the option to purchase an additional 750,000 shares of the Company's common stock
for net proceeds of $16.7 million after deducting underwriting discounts and commission of $1.0 million. Concentra shares began
trading on the New York Stock Exchange under the symbol "CON" on July 25, 2024. In connection with the offering, Concentra
Health Services, Inc. ("CHSI"), a wholly-owned subsidiary of Concentra, entered into certain financing arrangements which
include Credit Facilities and $650.0 million aggregate principal amount of 6.875% Senior Notes due 2032 (the "Notes").
The Notes are unconditionally guaranteed, jointly and severally, on a senior unsecured basis by Concentra and certain of its wholly-owned
subsidiaries. The Credit Facilities consist of an $850.0 million Term Loan and a $400.0 million Revolving Credit Facility. The
Revolving Credit Facility was undrawn at the time of closing. The Term Loan matures on July 26, 2031 and has an interest rate of
Term SOFR plus 2.25%, subject to a leverage-based pricing grid. The Revolving Credit Facility matures on July 26, 2029 and has an
interest rate of Term SOFR plus 2.50%, subject to a leverage-based pricing grid.
The net proceeds of the IPO and the debt financing
transactions, except for $34.7 million, were paid to Select Medical Corporation through the issuance of a dividend and the repayment of
Concentra is the largest provider of occupational
health services in the United States by number of locations, with the mission of improving the health of America's workforce, one
patient at a time. Our 11,000 colleagues and affiliated physicians and clinicians support the delivery of an extensive suite of services,
including occupational and consumer health services and other direct-to-employer care, to more than 50,000 patients each day on average
across 45 states at our 549 occupational health centers, 156 onsite health clinics at employer worksites, and Concentra Telemed as of
host a conference call regarding its third quarter results and its business outlook on Friday, November 1, 2024, at 10:30 am ET.
The conference call will be a live webcast and can be accessed at Concentra Group Holdings Parent, Inc.'s website at www.concentra.com
and a replay of the webcast will be available shortly after the call through the same link.
For listeners wishing
to dial-in via telephone, or participate in the question and answer session, you may pre-register for the call at Concentra
Earnings Call Registration to obtain your dial-in number and unique passcode.
contained herein that are not descriptions of historical facts are "forward-looking" statements (as such term is defined in
the Private Securities Litigation Reform Act of 1995), including statements related to Concentra's 2024 and long-term business outlook.
Because such statements include risks and uncertainties, actual results may differ materially from those expressed or implied by such
forward-looking statements due to factors including the following:
Except as required by applicable law, including
the securities laws of the United States and the rules and regulations of the SEC, we are under no obligation to publicly update
or revise any forward-looking statements, whether as a result of any new information, future events, or otherwise. You should not place
undue reliance on our forward-looking statements. Although we believe that the expectations reflected in forward-looking statements are
reasonable, we cannot guarantee future results or performance.
Vice President, Strategy & Investor Relations
SOURCE: Concentra Group Holdings Parent, Inc.
I. Condensed Consolidated Statements of Operations
For the Third Quarter Ended September 30, 2024 and 2023
(In thousands, except per share amounts, unaudited)
| 2024 | 2023 | % Change | ||||||||||
| Revenue | $ | 489,638 | $ | 473,964 | 3.3 | % | ||||||
| Costs and expenses: | ||||||||||||
| Cost of services, exclusive of depreciation and amortization | 351,103 | 336,812 | 4.2 | |||||||||
| General and administrative, exclusive of depreciation and amortization (1) | 37,088 | 38,245 | (3.0 | ) | ||||||||
| Depreciation and amortization | 15,213 | 17,959 | (15.3 | ) | ||||||||
| Total costs and expenses | 403,404 | 393,016 | 2.6 | |||||||||
| Income from operations | 86,234 | 80,948 | 6.5 | |||||||||
| Other income and expense: | ||||||||||||
| Interest expense on related party debt | (2,691 | ) | (11,255 | ) | N/M | |||||||
| Interest expense | (21,369 | ) | (64 | ) | N/M | |||||||
| Income before income taxes | 62,174 | 69,629 | (10.7 | ) | ||||||||
| Income tax expense | 16,415 | 15,205 | 8.0 | |||||||||
| Net income | 45,759 | 54,424 | (15.9 | ) | ||||||||
| Less: Net income attributable to non-controlling interests | 1,421 | 1,318 | 7.8 | |||||||||
| Net income attributable to Concentra | $ | 44,338 | $ | 53,106 | (16.5 | )% | ||||||
| Basic and diluted earnings per common share: (2) | $ | 0.37 | $ | 0.51 |
II. Condensed Consolidated Statements of Operations
For the Nine Months Ended September 30, 2024 and 2023
(In thousands, except per share amounts, unaudited)
| 2024 | 2023 | % Change | ||||||||||
| Revenue | $ | 1,435,151 | $ | 1,397,341 | 2.7 | % | ||||||
| Costs and expenses: | ||||||||||||
| Cost of services, exclusive of depreciation and amortization | 1,027,366 | 994,726 | 3.3 | |||||||||
| General and administrative, exclusive of depreciation and amortization (1) | 110,825 | 109,898 | 0.8 | |||||||||
| Depreciation and amortization | 51,568 | 54,552 | (5.5 | ) | ||||||||
| Total costs and expenses | 1,189,759 | 1,159,176 | 2.6 | |||||||||
| Other operating income | 284 | 151 | 88.1 | |||||||||
| Income from operations | 245,676 | 238,316 | 3.1 | |||||||||
| Other income and expense: | ||||||||||||
| Equity in losses of unconsolidated subsidiaries | (3,676 | ) | (526 | ) | 598.9 | |||||||
| Interest expense on related party debt | (21,980 | ) | (33,831 | ) | N/M | |||||||
| Interest expense | (21,275 | ) | (108 | ) | N/M | |||||||
| Income before income taxes | 198,745 | 203,851 | (2.5 | ) | ||||||||
| Income tax expense | 49,648 | 47,964 | 3.5 | |||||||||
| Net income | 149,097 | 155,887 | (4.4 | ) | ||||||||
| Less: Net income attributable to non-controlling interests | 4,066 | 3,775 | 7.7 | |||||||||
| Net income attributable to Concentra | $ | 145,031 | $ | 152,112 | (4.7 | )% | ||||||
| Basic and diluted earnings per common share: (2) | $ | 1.32 | $ | 1.46 |
III. Earnings per Share
For the Three and Nine Months Ended September 30,
(In thousands, except per share amounts, unaudited)
At September 30, 2024, the Company's
capital structure consists of common stock. There were no participating shares or securities outstanding during the three and nine months
ended September 30, 2024.